London Stock Exchange Group Explained

London Stock Exchange Group plc
Type:	Public limited company
Traded As:	FTSE 100 Component
Industry:	Financial services
Operating Income:	£2.862 billion (2023)
Net Income:	£0.948 billion (2023)
Location:	Paternoster Square London, England, UK

London Stock Exchange Group plc, also known as LSEG, is a global provider of financial markets data and infrastructure. Headquartered in the City of London, England. It owns the London Stock Exchange (on which it is also listed), Refinitiv, LSEG Technology,^[1] FTSE Russell, and majority stakes in LCH and Tradeweb.

History

The London Stock Exchange was founded in Sweeting's Alley in London in 1801.^[2] It moved to Capel Court the following year.^[2]

In 1972, the Exchange moved to a new purpose-built building and trading floor in Threadneedle Street. Deregulation, sometimes known as "big bang", came in 1986 and external ownership of member firms was allowed for the first time.^[2] In 1995, the Alternative Investment Market was launched and in 2004 the Exchange moved again, this time to Paternoster Square.^[2]

Between April and May 2006, having been rebuffed in an informal approach, Nasdaq built up a 23% stake in the Exchange.^[3] The stake grew to 29% as a result of the London exchange's share consolidation.^[4] Nasdaq has since sold its investment.^[5]

In 2007, the Exchange acquired the Milan-based Borsa Italiana for €1.6bn (£1.1bn; US$2bn) to form the London Stock Exchange Group plc. The combination was intended to diversify the LSE's product offering and customer base. The all-share deal diluted the stakes of existing LSE shareholders, with Borsa Italiana shareholders receiving new shares representing 28 per cent of the enlarged register.^[6]

On 16 September 2009, the London Stock Exchange Group agreed to acquire Millennium Information Technologies, Ltd., a Sri Lankan-based software company specialising in trading systems, for US$30m (£18m). The acquisition was completed on 19 October 2009.^[7]

On 9 February 2011, TMX Group, operator of the Toronto Stock Exchange agreed to join forces with the London Stock Exchange Group in a deal described by TMX head Tom Kloet as a 'merger of equals' (though 8/15 board members of the combined entity will be appointed by LSE, 7/15 by TMX).^[8] The deal, subject to government approval would create the world's largest exchange operator for mining stocks.^[9] In the UK, the LSE Group first announced it as a takeover, however in Canada the deal was reported as a merger.^[10] The provisional name for the combined group would be LTMX Group plc.^[11] On 13 June 2011, a rival, and hostile bid from the Maple Group of Canadian interests, was unveiled for the TMX Group. This was a cash and stock bid of, launched in the hope of blocking the LSE Group's takeover of TMX. The group was composed of the leading banks and financial institutions of Canada.^[12] The London Stock Exchange however announced it was terminating the merger with TMX on 29 June 2011 citing that "LSEG and TMX Group believe that the merger is highly unlikely to achieve the required two-thirds majority approval at the TMX Group shareholder meeting".^[13]

In July 2012, the LSE bought a 5% stake in Delhi Stock Exchange.^[14]

On 2 June 2014, the LSE became the 10th stock exchange to join the United Nations' Sustainable Stock Exchanges (SSE) initiative.^{[15] [16] [17]}

On 26 June 2014, the LSE announced it had agreed to buy Frank Russell Co., making it one of the largest providers of index services.^[18]

In January 2015, Reuters reported that the London Stock Exchange Group planned to put Russell Investments up for sale, and estimates the sale will produce $1.4 billion.^[19]

In March 2016, the company announced it had reached an agreement with to merge. The companies would have been brought under a new holding company, UK TopCo, and would retain both headquarters in London and Frankfurt.^[20] On 25 February 2017, the London Stock Exchange Group PLC stated it would not sell its fixed-income trading platform in Italy to AG, to appease anti-trust concerns. The planned merger between the two exchanges, which was estimated to create the largest exchange in Europe, was subsequently described as "at risk" by the Wall Street Journal.^[21] The merger attempt was blocked by EU Competition Regulator on 29 March 2017 stating that "The Commission's investigation concluded the merger would have created a de facto monopoly in the markets for clearing fixed income instruments".^[22]

In August 2019, the company agreed to buy Refinitiv in an all-share transaction valuing the target at $27 billion.^[23] Shortly thereafter, on 11 September 2019, LSEG itself became the target of a £32 billion bid by the Hong Kong Exchanges and Clearing, subject to abandoning its plans to buy Refinitiv.^[24] LSEG rejected the takeover bid two days later.^[25] In order to secure the Refinitiv deal, in July 2020, LSEG announced that it was considering selling its Italian assets including MTS, Italian bond trading venue and potentially Borsa Italiana.^[26]

On 18 September 2020, LSEG entered into exclusive talks to sell the Italian Bourse to Euronext.^[27] The acquisition was announced on 9 October of that same year and was completed on 29 April 2021.^[28]

In August 2023, LSEG said it intends to retire the Refinitiv name across the group, starting with market-data terminal Refinitiv Workspace, which will become LSEG Workspace from the end of August 2023.^[29]

Leadership

The positions of chairman and Chief Executive of the London Stock Exchange Group were founded in 2007, upon the establishment of the Group. This is not to be confused with the chairmen and Chief Executive's of the London Stock Exchange plc, which is a subsidiary of the Group. The current Chief Executive is former Goldman Sachs banker David Schwimmer, who was appointed in 2018, replacing Xavier Rolet, who was ousted in November 2017.^[30] Schwimmer's most recent role at Goldman Sachs was serving as "global head of market structure and global head of metals and mining in investment banking".

Senior leadership

• Chairman: Don Robert (since January 2019)
• Chief Executive: David Schwimmer (since April 2018)

List of former chairmen

1. Chris Gibson-Smith (2007–2015)^[31]
2. Sir Donald Brydon (2015–2018)^[32]

List of former chief executives

1. Dame Clara Furse (2007–2009)
2. Xavier Rolet (2009–2017)

Principal subsidiaries

Principal subsidiaries areas follows:^[33]

	Principal activity	Country of incorporation	% equity and votes held
Held directly by the company:
London Stock Exchange	Recognised investment exchange	UK/Italy	100
Held indirectly by the company:
Banque Centrale De Compensation	CCP clearing services	France	73.45
Financial Risk and Organisation Limited	IP owner	UK	100
Frank Russell Company	Market indices provider	US	100
FTSE International	Market indices provider	UK	100
LCH	CCP clearing services	UK	82.61
Refinitiv France SAS	Market and financial data provider	France	100
Refinitiv Hong Kong Limited	Market and financial data provider	Hong Kong	100
Refinitiv Germany GmbH	Market and financial data provider	Germany	100
Refinitiv Asia Pte Limited	Market and financial data provider	Singapore	100
Refinitiv Germany GmbH	Market and financial data provider	Germany	100
Refinitiv Japan KK	Market and financial data provider	Japan	100
Refinitiv Limited	Market and financial data provider	UK	100
Refinitiv US LLC	Market and financial data provider	US	100
Tradeweb Markets LLC	Multi-lateral trading facility	US	51.30

Operations

Following the merger with Borsa Italiana, the group is Europe's leading equities business, with 48% of the FTSEurofirst 100 by market capitalisation and with the most liquid order book by value and volume traded.^[34] Its activities include:

• London Stock Exchange: The London Stock Exchange is Europe's leading stock exchange and is owned by the London Stock Exchange Group plc.^[35]
• LSEG Technology: LSEG Technology was acquired by LSEG in 2009 as their technology service provider. The company was originally known as MillenniumIT and was subsequently rebranded as LSEG Technology.^[36] It offers a trading platform known as Millennium Exchange and is available for use at most of the leading stock markets in the world.^[37]
• Cassa di Compensazione e Garanzia ('CC&G'): CC&G provides central counterparty services. It was purchased along with Borsa Italiana in 2007.^[38]
• Monte Titoli: Monte Titoli is the Italian Central Securities Depository for Italian issued financial instruments. It performs pre-settlement, settlement and custody services for its member participants. It was created in 1978 and acquired by the Borsa Italiana in 2002 before becoming part of the LSEG.^[39]
• Turquoise: On 21 December 2009, the LSE agreed to take a 60% stake in rival trading platform Turquoise, which currently has a 7% share of the market. Turquoise will be merged with the LSE's trading facility Baikal Global.^[40]
• LCH: On 3 April 2012, LSE and LCH shareholders voted overwhelmingly to take up to 60 percent of the clearing operator with an offer of 20 euros per share, which valued LCH at 813 million euros ($1.1 billion).^[41]
• FTSE Russell: Through its acquisition of the Frank Russell Company in 2015, London Stock Exchange Group combined FTSE Group with Russell Indexes to form FTSE Russell, now one of the largest index providers in the world.^[42]
• Mergent: On 21 November 2016 LSEG announced plans to acquire Mergent Inc, provider of business and financial information on public and private companies.^[43]
• The Yield Book and Citi Fixed Income Indices: On 30 May 2017 LSEG announced the acquisition of The Yield Book and Citi Fixed Income Indices, leading providers of fixed income analytics systems, for $685 million.^{[44] [45]}
• AAX: On 22 January 2019, LSEG announced that its Millennium Exchange matching engine technology had been selected by digital asset exchange AAX, marking the first time its solutions are applied in the digital assets economy.^{[46] [47]}
• In September 2023, LSEG drew up plans for a new digital markets business to offer trading of traditional financial assets using blockchain technology. The new entity is expected to be launched within a year.^[48]

Arms

Notes:	Granted 26 May 2023 by the College of Arms.
Escutcheon:	Azure a Lion passant guardant Or armed proper surmounting the base of a Tower also Proper.
Crest:	None recorded
Helm:	None recorded, as per usual
Supporters:	On either side a Griffin Sable armed proper murally crowned Or.^[49]
Badge:	Within a Circlet of Annulets interlaced a Balance Azure.

See also

• Market maker
• Alternative Investment Market
• List of stock exchanges
• List of stock exchanges in the United Kingdom, the British Crown Dependencies and United Kingdom Overseas Territories
• List of stock exchanges in the Commonwealth of Nations

Notes and References

1. Web site: LSEG MillenniumIT Acquisition. London Stock Exchange Group. 30 November 2013.
2. Web site: Our history. londonstockexchange.com. 20 March 2015. https://web.archive.org/web/20150317132649/http://www.londonstockexchange.com/about-the-exchange/company-overview/our-history/our-history.htm. 17 March 2015. dead.
3. Web site: Warnings in vogue at French Connection. Financial Times. 8 March 2018.
4. Web site: Prospectus. London Stock Exchange Group plc. 8 March 2018.
5. Web site: LSE rejects £2.7bn Nasdaq offer. BBC. 20 March 2015.
6. Web site: London Stock Exchange buys Borsa. BBC. 20 March 2015.
7. Web site: Latest News. millenniumit.com. 20 March 2015.
8. Web site: LSE jumps on TMX purchase plan. reuters.com. 20 March 2015.
9. News: TSX operator, London exchange agree to merge. 9 February 2011 . CBC News.
10. Web site: FACTBOX-LSE to buy Toronto exchange. reuters.com. 20 March 2015.
11. Wall Street Journal, "A Combined TMX-LSE Would Be Called LTMX Group", Ben Dummett, 1 June 2011
12. Reuters, "Maple Group goes hostile for TMX", Solarina Ho
13. Web site: Toronto-London stock exchange merger terminated. 29 June 2011. thestar.com. 20 March 2015.
14. Web site: Shah . Palak . British bourse LSE buys 5% stake in Delhi Stock Exchange . Business Standard . Business Standard Ltd . 5 July 2012 . 4 September 2012.
15. Web site: London Stock Exchange Group joins UN sustainable stock exchanges initiative. London Stock Exchange. London Stock Exchange. 3 June 2014. LSE joins SSE.
16. Web site: Malone. Charlotte. London Stock Exchange joins UN sustainability initiative. Blue&Green Tomorrow. Blue&Green Tomorrow. 3 June 2014. BlueGreen.
17. Web site: MOSS. GAIL. London Stock Exchange joins UN sustainable stock exchanges initiative. IPE. Investments and Pensions Europe. 3 June 2014. IPE.
18. Web site: Walker. Ian. London Stock Exchange to Buy U.S. Asset Manager Frank Russell for $2.7 Billion. The Wall Street Journal. 26 June 2014.
19. Web site: Deals of the day- Mergers and acquisitions. Reuters . 2 February 2015 .
20. News: London Stock Exchange and Deutsche Boerse agree merger. 16 March 2016. BBC News. 16 March 2016.
21. News: Dummett . Ben . 27 February 2017 . London Stock Exchange Merger With Deutsche Börse at Risk Over Antitrust Issues . . . 27 February 2017 .
22. Web site: European Commission – PRESS RELEASES – Press release – Mergers: Commission blocks proposed merger between Deutsche Börse and London Stock Exchange. europa.eu. 21 July 2017.
23. Web site: London Stock Exchange clinches acquisition of Refinitiv for $27bn. Financial Times.
24. Web site: London Stock Exchange gets £32bn Hong Kong bid. BBC.
25. Web site: London Stock Exchange rejects Hong Kong takeover offer . CNBC . 13 February 2022 . en . 13 September 2019.
26. News: LSE considers selling Italian assets to secure Refinitiv deal . Financial Times. Stafford. Phillip. 31 July 2020. 31 July 2020.
27. Web site: LSE engages Euronext in exclusive Borsa Italiana talks. 18 September 2020. Business Insider. 21 September 2020.
28. News: Euronext completes purchase of Italian stock exchange. 29 April 2021. The Independent. 8 October 2021.
29. Web site: 3 August 2023 . UPDATE: London Stock Exchange to ditch Refinitiv brand completely . 29 August 2023 . MorningstarUK . en-GB.
30. News: Strydom. Martin. LSE picks Goldman's David Schwimmer as its new chief. 13 April 2018. The Times. 13 April 2018.
31. News: 8 April 2003 . LSE names Gibson-Smith as chairman . .
32. Web site: 14 December 2018 . LSEG announces appointment of Donald Robert as a Non-Executive Director and then to succeed Donald Brydon as Chairman after 2019 AGM .
33. Web site: Annual Report 2021. London Stock Exchange Group. 12 March 2022.
34. Web site: Investor relations. londonstockexchange-ir.com. 20 March 2015.
35. Web site: London Stock Exchange. Exchanges Journal. 9 April 2017.
36. Web site: LSEG Technology. The new name for our technology business..
37. Web site: London Stock Exchange Group to acquire MillenniumIT for US$30M (£18M) . London Stock Exchange . 19 November 2013 . dead . https://web.archive.org/web/20131019165211/http://www.londonstockexchange.com/about-the-exchange/media-relations/press-releases/2009/london-stock-exchange-group-to-acquire-millenniumit-for-us30m-18m.htm . 19 October 2013 .
38. Web site: LSE backs possible joint bid for LCH.Clearnet. reuters.com. 20 March 2015.
39. Web site: The Monte Titoli Shareholders Approve The Financial Statement For Year 2002. 17 April 2003. Mondovisione. 9 April 2017.
40. Web site: BBC News – LSE reveals takeover of Turquoise. bbc.co.uk. 20 March 2015.
41. Web site: LSE wins shareholder backing for LCH deal. reuters.com. 20 March 2015.
42. Web site: LSEG launches new FTSE Russell brand. London Stock Exchange Group. 30 April 2016.
43. News: London Stock Exchange adds to data service with Mergent takeover. The Telegraph. 21 July 2017.
44. News: LSEG to acquire The Yield Book and Citi Fixed Income Indices. London Stock Exchange Group. 11 October 2018. en.
45. News: LSE to buy Citi's bond data and indexes business for $685 million. Hussain. Noor Zainab. U.S.. 11 October 2018. en-US.
46. Web site: LSEG Technology selected by ATOM to power the AAX digital asset exchange. London Stock Exchange Group. en. 1 July 2019.
47. Web site: AAX – Trade Digital Assets with Confidence. www.aax.com. 1 July 2019.
48. News: 4 September 2023 . LSEG explores blockchain for cross-asset digital 'ecosystem' . en . Reuters . 4 September 2023.
49. Web site: September 2023 Newsletter (no. 72) . College of Arms . 19 September 2023.